How to: create an integrated and inclusive operating approach
Building upon our realising the extraordinary series and findings focused on ‘people’, we explore how businesses can achieve major project outcomes – while inspiring, motivating and enabling teams.
Over the past two decades, the infrastructure sector has been working to overcome the challenges of siloed organisations by moving towards a more integrated operating model. These siloed approaches are a source of cost increases and time delays, and typically result from poor baton changes between teams or functions over the project lifecycle.
Ultimately, the lack of integration within an organisation can challenge productivity and collaboration and drive a focus on compliance, rather than the collective outcome the programme is seeking to achieve. Silos are often seen between an organisation’s business functions, but can be just as detrimental when they exist between the client and its supply chain.
At an individual employee or team level, siloed working can result in a culture of mistrust, blame and frequent misunderstanding between individuals, teams and functions.
It has created challenges, both for working across teams (horizonal integration) and up and down organisational hierarchies and supply chains (vertical integration). This was evident in our global survey which highlighted that key reasons why projects fail are lack of collaboration (31 percent), culture of core team (27 percent) and lack of transparency between parties (27 percent). Collectively, this equates to more than 60 percent of reasons why projects fail being attributed to people-related capabilities, approaches or the team culture.
Too often, siloed working leads to the industry being perceived as adversarial and closed to professionals from other backgrounds. This perpetuates stereotypes which, ironically, dissuade people from other industries or backgrounds from working in construction. This means people from a diverse range of backgrounds bringing new ideas or skills, who are used to working in highly integrated and inclusive industries, are less attracted to the industry.
We must address these challenges to create an integrated and inclusive operating approach, so that we have vertical and horizontal integration – and create organisational cultures with behaviours focused on collaboration and inclusivity.
Characteristics of organisations lacking integrated approaches
Different organisations and project teams have different maturity levels in adopting an integrated and inclusive approach. Our experience has enabled us to identify typical indicators of organisational models that are not inclusive and integrated:
- People and teams with minimal interfaces and limited communication with other functions or teams in the same project.
- Frequent misalignment of outcomes and differing priorities common between teams and functions, and between clients and supply chain.
- A static view of the capability required to deliver across the project’s life, which fails to appreciate the need for different skills to be introduced at various project lifecycle stages.
- Low energy and limited drive in project teams, often with a compliance-led approach. This can result in conflict or a blame culture arising as problems are passed to the next stage of a process, for another team to inherit.
- Limited diversity and inclusion within the workforce and the organisation, with reward focussed on recognising skills and behaviours that continue a ‘delivery at all cost’ mentality.
- Lessons learned which pick up rework as consistent issues. This is commonly due to a failure to plan the design stages with sufficient stakeholder and team integration and collaboration.
- People directed towards short term, capex-focussed decision-making, rather than whole-life value. This can have impactful consequences for other teams and functions later in the delivery stages with little engagement and agreement between functions.
- The programme is very task focussed, rather than evolving a strong programme business.
Creating an integrated and inclusive operating approach
The following four steps are needed to create an integrated and inclusive operating approach in organisations:
1. Design an ‘enabled’ organisation
Organisational design is more than an organogram of the roles and people delivering the project. It should show the structure of the project team and the design of organisational practices that will support the programme, including the organisational systems, people practices, reward, performance management, culture and processes.
Over time there have been many designs to deliver projects that have moved from a centralised to a de-centralised hub of control, and back again. More recently, matrix or network organisations have been favoured as they enable greater agility to quickly adapt and respond to changing needs or disruption.
For example: A European hub airport recently adopted an integrated, project-led matrix organisation with a framework governance model and a ‘best athlete’ approach to capability.
The organisational design must also plot where the required capability will be homed, and how resources will be deployed to provide the right capability, at the right time. With more enabled organisations, there needs to be a framework or guidelines for flexibility and control, best served by a ‘right-fit’ governance model to support more agile decision-making. The organisational design can also support effective job design to create roles with clear lines of accountability, behavioural expectations and required competencies, contributing to bringing the design to life and enabling effective programme delivery.
Lastly, the design of the organisation needs to include the supply chain, to create an integrated ecosystem of people who are delivering.
Traditionally, there has been friction between organisations and the supply chain, leading to conflict and contractual mechanisms which can deter effective working relationships. By understanding how the supply chain can work co-operatively with the organisation, within the organisational design, contracts can be agreed which are mutually beneficial, aligned to the delivery of the programme outcomes and support integration, rather than undermining it. This was evident in our March 2021 market poll which identified that collaboration and treating suppliers as part of the client organisation are vital for success on major programmes.
2. Refocus leadership
Leaders need to set the direction by understanding and collectively focusing on programme outcomes and building the culture and capability around these. Leaders will have accountability for leading discrete functions or teams within a programme organisation, but their role should not be limited to achievement of the specific team or functional goals alone and should instead reflect the overarching measures of successful programme delivery.
This can mean leaders have cross-functional priorities and objectives, which may be outside their immediate control. However, this will drive collaborative working between functions and should result in innovation, better planning and less rework in later stages of delivery.
Too often when things do not go to plan, leaders have to dive down into the detail of a situation to enable a solution successfully. The industry’s leaders are often promoted based on development and recognition of their expertise in a technical discipline and so in stepping down to find issues and solutions people retreat to their comfort zone. This can prevent leaders from having the capacity to lead and focus on the wider business/programme challenges and deliverables.
Creating this capacity to lead and entrusting managers to manage can open opportunities in how functions can integrate and solutions be developed.
3. Create a flexible culture
Developing agility in programme delivery organisations can be challenging, when taking into account large budgets, risks and reputational factors. But it can also help people feel empowered in their working environment and create a culture where people are motivated. A move away from a traditional hierarchical organisational structure and associated layered decision-making and approval processes requires realigning processes to outcomes, rather than relying on a control mechanism to get tasks done.
It needs to facilitate people to self-direct their work, while understanding and being governed by the purpose and objectives of the programme – so that they are always working towards the reason the programme exists and the overall outcome, rather than functional or individual tasks.
A leading example is the approach adopted by an international hub airport programme – to create an integrated and inclusive approach, the airport prioritised behaviours and empowered decision-makers, regardless of home organisation. This enabled clarity through the delivery operating model, proactively creating an integrated and inclusive operating approach.
A flexible culture can be challenging for both leaders and employees.
It requires a constant level of change in people’s everyday working environment, which can disrupt productivity and make it harder to engage people. Leaders need to both manage the delivery of the programme and their people and learn to lead in a constant state of transition. This can be unsettling for people but can be mitigated by absolute clarity of project outcomes across the organisation and supply chain. This provides the guiding ‘north star’, which transcends programme stages, functions and tasks and provides a view on the overall outcome that teams are working towards, including socio-economic and project benefits.
During the life of a project, there will be a need for the organisational structure to evolve. This can challenge our instinctual desire for stability, but agile organisations plan for evolution and build a culture that is clear and purposeful, but challenges people to adapt.
4. Adopt a hands-on, transparent approach
There is a need to set the programme outcomes and purpose at the heart of how the programme will operate and how it will connect people to the benefits the programme will realise. Creating clarity and a route map enables people to support the ‘common good’ and establishes a decision framework. The framework provides guidance on where decisions can be taken and what considerations need to be factored into them, including helping people understand when it is best to compromise their best practice functional approach for the overall good of the programme.
This can help embed a problem-solving mindset and culture, a vital characteristic in high-performing teams.
It is important to be clear with the supply chain on capability and capacity needs, creating an aligned development pathway that matures with the organisation. A hands-on, open and transparent approach demands that people feel engaged. Regular honest and consistent communication – upwards and downwards – also helps embed an inclusive approach.
Starting the integration journey now
Here are key recommendations for starting the integration journey now:
This sounds simple but to integrate effectively, organisations must be clear on where integration is key, how it will be facilitated between roles and functions, and what it aims to achieve. Once this is understood, leaders must be clear and communicate why integration is key, so employees understand what is expected of them and the benefits integration will provide. It is important also to test your organisational design to ensure the workflow through the organisation meets the intended outcome and does not inadvertently undermine the ambition, for example, by creating silos.
A more agile approach requires clients and supply chains to develop greater trust and fostering collaborative ways of working much earlier in the lifecycle, which can only be achieved if the project understands and implements the right project operating model from the outset. An example of such a collaborative outcome-based project delivery model, Project 13, was adopted at the Sellafield nuclear site in the UK.
Create an inclusive environment through culture
As leaders, be clear on how you want it to feel to work on the programme and develop an understanding of the role and contributions of each function. Build an organisational culture that is curious and seeks to continuously learn and develop where ideas are shared without fear and mistakes are considered learning opportunities.
To enable this culture all leaders must live the agreed values, role modelling what is expected of everyone while also calling out poor behaviours that are detrimental to achieving the programme outcome.
Linked to this, there must be a continual feedback loop on the culture and levels of employee engagement before looking for ways to evolve and improve the culture.
Many of these measures take time and must continually be lived and exhibited for them to be adopted. More immediate actions can also support these long term measures and include:
- Reviewing people management processes to ensure they are inclusive, from recruitment practices to recognition and promotion, ensuring the right behaviours are rewarded and negative behaviours are addressed.
- Measuring the level of diversity within the organisation and monitoring the statistics to identify any trends and any remedial action required.
An integrated, inclusive operating approach takes time but is vital for programme and organisational success long term. By creating an integrated organisational structure that is supported by an inclusive culture, staff can feel inspired, more engaged and empowered. Ultimately, this supports programme outcomes and success.